In the chapter systemic speed we concluded that the biggest obstacles to systemic speed are the queues between organizational units, “silos”. The previous unit has completed its tasks and sent its outcome to the next unit, which does not have the capability to start processing the newly arrived order right away, because it has older orders to be processed first. Thus, the order received is queued between organizational units.
Who is responsible for that queue? Normally nobody admits. Each organizational unit is responsible for its own area and considers from its process diagram that once it has delivered out what it was supposed to do, it has completed its job. The responsibility of the next unit, also according to its process diagram, begins when they take the next order from the work queue and start their unit’s tasks. The queue is in a grey zone, on no-man’s-land. The queue is not usually found in process descriptions. The organization manages its process piece by piece, instead of managing the whole process. A process description describes the value creating parts. The queue is not even mentioned because it does not create any new value.
What if we set someone to be accountable for the whole process and buy a helicopter for him/her so that he/she can certainly get high enough to see the whole? Pretty soon the helicopter pilot notices that the actual working in organizational units is already well-established. Quality and performance development work has been done for a long time. What comes now as a new thing, which can only be seen from the helicopter, are the work queues between the organizational units. Traditionally they have not belonged to anyone. Now they belong to the pilot, because he/she is responsible for the whole process, all the work queues included.
What can he/she, the process owner or executive, then do for the queues? He/she must find out why the next unit is not able to take the received order into its process right away. Often it is due to insufficient capacity. In the name of productivity, the resources have been reduced to ensure that the remaining people really work all the time. This may still get worse by other metrics and targets, leading deeper to sub-optimization. The management of the organizational unit will do what has been requested. Usually minimizing the queues in not included.
The key issue is the metrics driving activities. The silo-specific productivity-optimized metrics lead easily, if not even automatically, to heavy sub-optimization. The metrics need to be changed and this requires a helicopter perspective. Otherwise, the problems only move to another location, perhaps in a different form.
This is easy to say but challenging to implement in practice. Most of the process management experiments did not achieve this; there was no ability to unlearn from the past, especially missing the patience to figure out how the changes should be implemented into daily work. The philosophy was very commonly misunderstood and the whole process management was declared “slight”. Experience has shown that this change takes place through tacit knowledge and cannot be changed by displaying slides, by making new process descriptions or by dictating.
Those who understood correctly and implemented carefully soon became number one in their business. In short, it is about prioritizing the benefit of the whole, i.e. stopping sub-optimization. Then the total lead time shrinks automatically and the systemic speed increases. This also applies to product development and services. Dropping the lead time to one tenth is possible more often than we think. This will have a huge impact on overall productivity and profitability when properly implemented.
The benefit of speed gets realized through the balance sheet. Few dare to admit that they really do not understand this and this is why it is left undone. In logistics, this is still somehow understandable, because there are inventories that tie up the money. The same logic also applies to product development and services, even though they do not have any physical stocks. In all these the systemic speed-enabled benefits can be calculated to money but this cannot be done without a helicopter perspective and profound understanding.
Also read: